More Americans with full-time jobs are moonlighting

The Daily Shot: 12-Dec-23
The United States
Canada
The United Kingdom
The Eurozone
Europe
Japan
Asia-Pacific
China
Emerging Markets
Cryptocurrency
Commodities
Energy
Equities
Credit
Global Developments
Food for Thought



 

The United States

1. Let’s begin with some updates on inflation.
 
Nomura estimates an uptick in the core CPI in November, …
 
Source: Nomura Securities  
 
… as some volatile items rebound.
 
Source: Nomura Securities  
 
Hotel costs and medical care likely boosted the supercore CPI.
 
Source: Nomura Securities  
 
The right-tail distribution of price changes has shifted partly back to its pre-pandemic position.
 
Source: Goldman Sachs  
 
Slower gains in labor costs point to a moderation in services inflation.
 
Source: Oxford Economics  
 
Leading indicators continue to signal slower inflation ahead.
 
Source: Deutsche Bank Research  
 
Morgan Stanley expects headline inflation to decline to the 2% target in 2025, …
 
Source: Morgan Stanley Research  
 
… as the relative price of core goods versus services narrows closer toward the historical trend.
 
Source: Morgan Stanley Research  
 
Over the long run, demographics will put downward pressure on inflation.
 
Source: BofA Global Research  
 
The NY Fed’s consumer survey showed falling inflation expectations last month.
 

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2. Next, let’s look at some rental cost trends.
 
Alternative measures of new-lease rent growth:
 
Source: Goldman Sachs; @MikeZaccardi  
 
Cities reporting negative rent growth:
 
Source: Apartment List  
 
Apartment vacancy rates (now above pre-COVID levels):
 
Source: Apartment List  

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3. Here is an overview of US consumers’ misconceptions about the economy:
 
Source: @financialtimes   Read full article  
 
4. Households’ interest income is growing.
 
Source: Oxford Economics  
 
5. Financial conditions continue to ease.
 

 
6. Finally, we have some data on the labor market.
 
More Americans with full-time jobs are moonlighting.
 

 
Job openings are increasingly driven by small businesses.
 
Source: @WSJ   Read full article  
 
Permanent job losses remain low but have been trending up.
 
Source: Wells Fargo Securities  
 
This chart shows the year-to-date employment gains by industry.
 
Source: Wells Fargo Securities  


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Canada

1. The population boom is expected to ease over the coming years.
 
Source: Oxford Economics  
 
2. Migrant wages tend to converge with Canadian-born over time.
 
Source: Oxford Economics  
 
3. Canada’s GDP per capita has diverged from that of the US.
 
Source: PGM Global  


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The United Kingdom

1. PMI data signals easing services inflation.
 
Source: Pantheon Macroeconomics  
 
2. Surveys point to higher unemployment and softer wage growth ahead.
 
Source: Barclays Research  
 
3. Who is getting skilled-work visas?
 
Source: The Economist   Read full article  


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The Eurozone

1. Economists downgraded Germany’s 2024 GDP growth forecasts again.
 

 
Here is the consensus projection for Spain.
 

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2. This table shows some scenarios for the ECB’s policy stance this week (from ING).
 
Source: ING  
 
Capital Economics expects five 25 bps rate cuts next year.
 
Source: Capital Economics  

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3. Germany’s shares continue to surge.
 


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Europe

1. Norway’s core inflation eased last month.
 

 
Source: @economics   Read full article  
 
Here is the 2-year yield.
 

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2. Who are the largest dairy producers in the EU?
 
Source: Eurostat   Read full article  
 
3. This chart shows the share of adults with low educational attainment.
 
Source: Eurostat   Read full article  


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Japan

1. The markets now see almost zero chance of a rate hike this month.
 

 
Source: @economics   Read full article  

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2. Machine tool orders were relatively soft last month.
 


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Asia-Pacific

1. Taiwan’s exports were above last year’s levels in November.
 

 
The trade surplus topped expectations.
 

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2. Australia’s consumer confidence edged higher this month.
 

 
Business sentiment is rolling over.
 


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China

1. Economic activity is starting to improve.
 
Source: MRB Partners  
 
2. Local government debt increasingly dominates China’s bond market.
 
Source: @WSJ   Read full article  
 
3. This chart shows China’s imports of semiconductor manufacturing equipment.
 
Source: Rhodium Group   Read full article  
 
4. Hong Kong’s voter turnout tumbled this year.
 
Source: @bpolitics   Read full article  


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Emerging Markets

1. Let’s begin with some updates on India.
 
The stock market continues to rally.
 

 
India experienced a capex boom over the past few years alongside a surge in credit growth. (2 charts)
 
Source: Alpine Macro  
 
Source: Alpine Macro  
 
The rise in personal loans has not led to a pickup in consumption growth. According to Alpine Macro, some borrowings may have been channeled to asset markets.
 
Source: Alpine Macro  

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2. Turkey’s industrial production declined again in October.
 

 
The unemployment rate continues to fall.
 

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3. Here is a look at foreign investment in Vietnam.
 
Source: Reuters   Read full article  
 
4. Ukraine’s year-over-year GDP growth topped expectations.
 


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Cryptocurrency

1. Bitcoin saw a sharp pullback on Monday, with leveraged players forced to exit.
 

 
2. Crypto returns are still positive month-to-date.
 

 
3. Crypto funds saw an 11th straight week of inflows, although the pace has slowed.
 
Source: CoinShares   Read full article  
 
Short-bitcoin products attracted fresh capital while investors exited multi-asset funds last week.
 
Source: CoinShares   Read full article  

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4. Solana NFT marketplaces have experienced a rise in trading volumes.
 
Source: @MessariCrypto  
 
5. Blockchain developer activity remains elevated despite the slowdown in recent years.
 
Source: Global X ETFs   Read full article  


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Commodities

1. Gold is back below $2000/oz.
 

 
Central banks bought almost as much gold this year as in 2022.
 
Source: S&P Dow Jones Indices  

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2. Lithium prices continue to sink.
 

 
3. Flash memory prices are rebounding.
 

 
4. Instant coffee prices are on the rise.
 

 
Source: @markets   Read full article  

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5. Sugar futures continue to sink.
 

 
6. Avocado prices have been moderating.
 


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Energy

1. Brent crude contango has intensified.
 

 

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2. This chart shows the Capital Economics forecast for OPEC production.
 
Source: Capital Economics  
 
3. Oil supply is up year-to-date despite the OPEC+ cuts.
 
Source: Numera Analytics (@NumeraAnalytics)  
 
4. Uranium prices keep climbing.
 

 
This chart shows US suppliers of enriched uranium.
 
Source: Sophie Caronello, @TheTerminal, Bloomberg Finance L.P.   Read full article  


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Equities

1. The Dow rally looks stretched.
 

 
2. On average, December has been the third-best month for the S&P 500 during pre-election years. Could we see another rally to close out the year? (2 charts)
 
Source: @ryandetrick  
 
Source: @ryandetrick  

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3. The S&P 500 typically performs well during non-recession election years.
 
Source: Truist Advisory Services  
 
4. IPO activity has been relatively soft.
 
Source: @FactSet   Read full article  
 
Post-IPO stocks rebounded since the October slump but continue to lag the Nasdaq 100.
 

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5. High total yields and rising buybacks could partially limit equity downside.
 
Source: Morgan Stanley Research  
 
6. Small-cap margins have diverged from large caps.
 
Source: PGM Global  
 
Small-cap earnings revisions breadth has also been lagging.
 
Source: Morgan Stanley Research; @dailychartbook  

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7. In aggregate, analysts expect the S&P 500 to top 5000 by the end of next year.
 
Source: @FactSet   Read full article  
 
Here are the target gains by sectror.
 
Source: @FactSet   Read full article  

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8. This chart shows US tech mega-caps in perspective.
 
Source: @MichaelAArouet, @DuncanLamont2  


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Credit

1. Weekly bankruptcy filings rose as the Fed hiked rates, although still below prior cycle highs.
 
Source: Torsten Slok,¬†Apollo  
 
S&P Global’s data, which covers middle-market and larger firms, shows bankruptcy filings slowing last month.
 
Source: S&P Global Market Intelligence  

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2. Investment-grade and high-yield firms show diverging corporate balance sheet strength.
 
Source: Oxford Economics  
 
European HY fundamentals are stronger than those of US peers.
 
Source: Oxford Economics  

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3. Here is a look at leveraged loan and high-yield bond issuance as well as the use of proceeds.
 
Source: Deutsche Bank Research  


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Global Developments

1. Will global economic activity surprise to the upside again in 2024?
 
Source: Truist Advisory Services  
 
2. China’s deflation tends to signal a global recession.
 
Source: @JeffreyKleintop  
 
3. Leading indicators suggest that factory activity will be rebounding in the months ahead.
 
Source: Deutsche Bank Research  


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Food for Thought

1. Who is talking about AI?
 
Source: @FactSet   Read full article  
 
2. Exposure to AI-driven automation:
 
Source: Goldman Sachs  
 
3. High demand for pilots:
 
Source: @WSJ   Read full article  
 
4. Views on the death penalty:
 
Source: Gallup   Read full article  
 
5. Getting the news on TikTok:
 
Source: Pew Research Center   Read full article  
 
6. US land-cover changes:
 
Source: National Climate Assessment   Read full article  
 
7. Average length of US military service:
 
Source: CBO  

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